The Investor Sentiment - Equity and investments forum for Sri Lankans
Search
 
 

Display results as :
 


Rechercher Advanced Search

Latest topics
» Coronavirus Updates
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyYesterday at 10:18 pm by The Invisible

» Thread for News on International Markets
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyYesterday at 7:39 am by The Invisible

» In the Meantime, Within Our Shores !
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyWed Apr 08, 2020 10:00 pm by කිත්සිරි ද සිල්වා

» Embrace Modernity or Perish is the Question Today
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyWed Apr 08, 2020 2:43 pm by කිත්සිරි ද සිල්වා

» Sri Lanka tea prices soar amid rupee fall, tight supplies at Coronavirus e-auction
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyWed Apr 08, 2020 2:40 pm by The Invisible

» Sri Lanka’s Colombo tea auction goes online amid Coronavirus curfew
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyWed Apr 08, 2020 10:09 am by The Invisible

» Cartoon Today
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyWed Apr 08, 2020 10:04 am by කිත්සිරි ද සිල්වා

» Thread for News on CSE and SL Economy
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyTue Apr 07, 2020 7:51 am by The Invisible

» ඩොලරයේ විකුණුම් මිල රු. 199 ඉක්මවයි
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyMon Apr 06, 2020 3:03 pm by කිත්සිරි ද සිල්වා

» මරණය-පෙනි-පෙනී-ඇමරිකාවට-ගිය-ගමන
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptySun Apr 05, 2020 8:00 pm by nihal123

» Happy Birthday
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptySat Apr 04, 2020 3:21 pm by pjrngroup

» Nikon Offering Free online Photography Classes
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptySat Apr 04, 2020 10:23 am by කිත්සිරි ද සිල්වා

» Oil, Gold & Silver Prices
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptySat Apr 04, 2020 9:39 am by කිත්සිරි ද සිල්වා

» A Simple but Powerful Yogic Process to Boost Immunity and Enhance Lung Capacity
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyFri Apr 03, 2020 8:15 pm by කිත්සිරි ද සිල්වා

» Sri Lanka finance companies pressured by Coronavirus: Fitch
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyFri Apr 03, 2020 1:12 pm by The Invisible

» Sri Lanka appeals for forex inflows to combat COVID-19, lifts inward restrictions
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyThu Apr 02, 2020 8:49 pm by The Invisible

» Sri Lanka to control imports except oil and medicines, grow vegetables: Minister
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyThu Apr 02, 2020 8:48 pm by The Invisible

» ඇඳුම නං නරක නෑ
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyWed Apr 01, 2020 9:48 am by The Invisible

» Kagame gives food, free electricity to every household during lockdown
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyTue Mar 31, 2020 10:07 am by කිත්සිරි ද සිල්වා

» MARKET HOLIDAY ON 30TH MARCH 2020
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptySun Mar 29, 2020 10:09 pm by කිත්සිරි ද සිල්වා

» Power of Social Media
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptySun Mar 29, 2020 1:19 pm by කිත්සිරි ද සිල්වා

» මනුස්සකම
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptySun Mar 29, 2020 10:10 am by LSE

» 450 Ivy League courses you can take online right now for free
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptySat Mar 28, 2020 2:32 am by pjrngroup

» අය කළ ණය වාරික නැවත ලබා දෙනවා – මහජන බැංකු සභාපති කියයි
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyFri Mar 27, 2020 12:02 pm by nihal123

» මේ දුප්පත් රටට ඔබේ ජීවිතය බේරලා දෙන්න උදව් කරන්න.
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyThu Mar 26, 2020 4:26 pm by malanp

» Coronavirus COVID-19 Live update
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyWed Mar 25, 2020 7:59 pm by nihal123

» Anytime Data
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyWed Mar 25, 2020 4:07 pm by pjrngroup

» Films - To Watch List
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyWed Mar 25, 2020 12:05 pm by yellow knife

» US Embassy urges Americans in Sri Lanka to leave
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyWed Mar 25, 2020 8:16 am by The Invisible

» Why we need to practise social distancing
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyTue Mar 24, 2020 8:44 pm by chutiputha

» මුළු දිවයිනටම ඇඳීරි නිතිය
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyTue Mar 24, 2020 8:17 pm by chutiputha

» නමක් ගමක් දන්නෙ නෑ රත්තරන් මනුස්සයෙක්
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyTue Mar 24, 2020 6:01 pm by nihal123

» Amazon today cancelled the subscription of books and audio stories
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyTue Mar 24, 2020 5:33 pm by කිත්සිරි ද සිල්වා

» ජනපතිගෙන් ජනතාවට සහන
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyMon Mar 23, 2020 8:59 pm by කිත්සිරි ද සිල්වා

» Sri Lanka asks telecos to give emergency credit to keep in touch in Coronavirus fight
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyMon Mar 23, 2020 7:35 am by The Invisible

» කොටස් වෙළෙඳපොළ හෙට පැය 03කට විවෘත කෙරේ. හැකි නම් නිවසේ සිට වැඩ කරන්න
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyMon Mar 23, 2020 7:18 am by The Invisible

» SAMP.N0000 (Sampath Bank PLC)
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptySun Mar 22, 2020 7:52 am by The Invisible

» INDUSTRIAL ASPHALTS (CEYLON) PLC (ASPH.N0000)
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptySat Mar 21, 2020 2:27 pm by serene

» Obituary Notice.
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptySat Mar 21, 2020 1:13 pm by කිත්සිරි ද සිල්වා

» Sri Lanka makes mini-budget till May 2020 under Presidential powers
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptySat Mar 21, 2020 9:49 am by The Invisible

» හෝමාගම රෝහලත් කොරෝනා රෝගීන් සඳහා වෙන් කරයි
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptySat Mar 21, 2020 9:43 am by nihal123

» People first, economy next, says top economist
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyFri Mar 20, 2020 9:59 am by Backstage

» කොටස් වෙළෙඳපොළ ගනුදෙනු හෙට යළි ඇරඹෙයි
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyFri Mar 20, 2020 8:34 am by malanp

» ඉන්දීය අගමැති මුළු රටටම ඇඳිරි නීතිය පනවයි
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyFri Mar 20, 2020 8:05 am by The Invisible

» Sri Lanka to fix fuel prices, build energy stability fund amid COVID-19 crude collapse
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyThu Mar 19, 2020 2:36 pm by කිත්සිරි ද සිල්වා

» නිවසේ සිට වැඩ කරන සතියක් : රජය සහ පුද්ගලික අංශය දෙකටම
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyThu Mar 19, 2020 2:31 pm by The Invisible

» Sri Lanka elections delayed over Coronavirus
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyThu Mar 19, 2020 2:27 pm by The Invisible

» Sri Lanka’s market closed over Coronavirus on March 19
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyThu Mar 19, 2020 9:31 am by The Invisible

» Sri Lanka stock market closed Tuesday in Coronavirus holiday
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyThu Mar 19, 2020 9:23 am by The Invisible

» Sri Lanka President orders 6-month debt moratorium, 4-pct working capital
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyWed Mar 18, 2020 3:17 pm by slstock

April 2020
SunMonTueWedThuFriSat
   1234
567891011
12131415161718
19202122232425
2627282930  

Calendar Calendar

Disclaimer


Information posted in this forum are entirely of the respective members' personal views. The views posted on this open online forum of contributors do not constitute a recommendation buy or sell. The site nor the connected parties will be responsible for the posts posted on the forum and will take best possible action to remove any unlawful or inappropriate posts.
All rights to articles of value authored by members posted on the forum belong to the respective authors. Re-using without the consent of the authors is prohibited. Due credit with links to original source should be given when quoting content from the forum.
This is an educational portal and not one that gives recommendations. Please obtain investment advises from a Registered Investment Advisor through a stock broker

Sri Lanka political crisis hikes debt rollover risk: Fitch

Go down

Sri Lanka political crisis hikes debt rollover risk: Fitch Empty Sri Lanka political crisis hikes debt rollover risk: Fitch

Post by The Invisible on Wed Oct 31, 2018 9:31 am

ECONOMYNEXT - Sri Lanka's political crisis triggered by appointing Mahinda Rajapaksa as Prime Minister would make it more difficult for the island to refinance foreign debt, Fitch Ratings said.

"Prolonged political upheaval accompanied by deterioration of policy continuity could undermine investor confidence and make it more challenging for the government to meet its large external financing needs in 2019-2022," Fitch said

"The outcome of the power struggle and possible implications for the sovereign rating (B+/Stable) remain uncertain."

Sri Lanka's budgets which had improved recently may be hit whatever the outcome of the crisis.

"..[T]he newly appointed Prime Minister Mahinda Rajapaksa, who served as president from 2005-2015, oversaw an aggressive Chinese-financed infrastructure drive and sharp increase in public debt during his second term from 2010-2015," he said.

"His return to prominence could pose risks to fiscal consolidation, although he has yet to state his policy priorities.

"Wickramasinghe, if he hangs on, might also be tempted to adopt a more populist fiscal stance, given the political pressure he has faced since the ruling coalition suffered heavy losses in local government elections in February."

The full statement is reproduced below:

Fitch Ratings: Sri Lanka's Political Standoff Lifts Refinancing Risk

Fitch Ratings-Hong Kong/Singapore-30 October 2018: The Sri Lankan president's sudden replacement of the prime minister on 26 October highlights tensions within the coalition government and creates uncertainty over further progress on reform and fiscal consolidation, says Fitch Ratings.

Prolonged political upheaval accompanied by deterioration of policy continuity could undermine investor confidence and make it more challenging for the government to meet its large external financing needs in 2019-2022.

The outcome of the power struggle and possible implications for the sovereign rating (B+/Stable) remain uncertain.

Ranil Wickramasinghe, who was sacked as prime minister, has called for a parliamentary vote to demonstrate his support, while members of his party have said they will consider impeachment proceedings against President Maithripala Sirisena on grounds that he exceeded his constitutional authority in replacing the prime minister.

The president has responded by suspending parliament until 16 November and, in the meantime, appears set to name a new cabinet. The ultimate shape of the government and its policy stance may not crystallise until parliament resumes.

We last affirmed Sri Lanka's sovereign rating in February 2018. At the time, we noted that potential negative rating sensitivities included deterioration of policy coherence and credibility, a derailment of the IMF support programme or a reversal of fiscal improvements leading to a failure to stabilise government debt ratios.

The IMF-led programme might help to anchor policy if there is a change in leadership, while the benefits of some recent structural reforms are likely to persist. For example, a VAT hike has pushed up the revenue-to-GDP ratio and narrowed the fiscal deficit, while the Inland Revenue Act, implemented from April 2018, is likely to increase revenue further.

Moreover, there is no indication that the central bank's autonomy will be undermined by the political upheaval. The central bank has been key to improved economic management under the IMF programme, with greater currency flexibility supporting foreign-currency reserves.

However, the newly appointed Prime Minister Mahinda Rajapaksa, who served as president from 2005-2015, oversaw an aggressive Chinese-financed infrastructure drive and sharp increase in public debt during his second term from 2010-2015.

His return to prominence could pose risks to fiscal consolidation, although he has yet to state his policy priorities.

Wickramasinghe, if he hangs on, might also be tempted to adopt a more populist fiscal stance, given the political pressure he has faced since the ruling coalition suffered heavy losses in local government elections in February.

Sri Lanka's public debt-to-GDP ratio is already 77.6%, which is well above the 62.9% median for sovereigns rated 'B' or lower.

The next test of the government's commitment to the targets set out under its IMF programme will be the 2019 budget, which is due to be delivered on 5 November.

A delay to the budget or slippage on targets could further undermine near-term investor sentiment, and might also jeopardise compliance with IMF targets under the IMF-supported programme, which is in any case due to expire in mid-2019.

The government is also behind schedule on introducing automatic electricity pricing - a structural benchmark under the IMF programme - which could see continued delays under the political upheaval.

Policy decisions that derail the IMF programme or lead to a loss of investor confidence could increase external financing challenges.

The external debt stock is equivalent to around 60% of GDP, and almost 30% of this (around USD15 billion) matures in 2019-2022. Moreover, almost half of public debt is denominated in foreign currency, which may create pressure if the rupee continues to weaken; it has lost 12% against the US dollar this year.
The Invisible
The Invisible

Posts : 1746
Join date : 2016-11-28
Age : 40

Back to top Go down

Back to top


 
Permissions in this forum:
You cannot reply to topics in this forum